"Today, we tried selling bulk sandwich cookies at 15.8-19.8 yuan per jin, but their sales performance couldn't match Oreo at 24.8 yuan per jin," said a clerk at a snack discount store.

Recent market visits and such feedback have led us to rethink the relationship between brands and channels.

Indeed, in the shrinking market environment of the past two years, retail channels have undergone drastic changes, with price and efficiency competition dominating discussions.

Content e-commerce, discount retail, instant retail... Most new retail channels are currently competing on price. Even supermarket overhauls with direct sourcing and private label development aim to drive prices down.

But price should not be the only variable measuring the relationship between channels and brands.

Costco's private label chips, water, and oats target Pepsi's Lay's, Aquafina, and Quaker respectively, yet this hasn't hindered Pepsi's sales growth at Costco.

Channels pursue efficiency, brands pursue brand value; each has its own duty.

But channel efficiency doesn't kill brands; it merely restructures brand value pricing and makes brands scarcer.

Under Retail's Pursuit of Efficiency Re-examining Brands and Brand Value

Retail's pursuit of efficiency is an irreversible historical process because retail bears the function of delivering goods to the entire society. As long as societal production efficiency advances, retail efficiency will inevitably improve.

As retail efficiency rises, price competition is inevitable.

Looking at current trends, China's retail will continue to compete for another 5 or 10 years. If brand business remains this difficult, what should be done next?

Globally, China's FMCG market is not leading; solutions can be found in mature European and American markets.

The objective fact is that in European and American markets that have undergone retail efficiency revolutions, almost every country still boasts world-class FMCG brands.

For example, Germany, the birthplace of hard discount, saw the birth of global hard discount giant Aldi after WWII in 1945, followed by another global hard discount giant Lidl, but also gave rise to the world-renowned century-old candy company Haribo.

Specific examples: In mature European and American markets, despite intense retail competition, many globally recognized FMCG brands have emerged.

North America is even more so; despite the highly developed warehouse discount format, global FMCG brands like Pepsi, Mars, Kraft, and Coca-Cola were born there.

No matter how high retail efficiency is, there are irreplaceable brands.

The market cannot do without brands. As the retail efficiency revolution deepens, brands become even scarcer.

But this common phenomenon raises the question: Under price competition, what kind of brands does the market truly need?

This also prompts us to re-examine brand value.

It seems brands have scarcity, but brand value is no longer scarce. Over the past two years, with retail efficiency reforms, brand demystification has been evident; not only are few brands raising prices, but many are effectively cutting prices.

Take beverages as an example: overall category prices have declined.

Data source: MaiShangYing Note: The index is based on 100; fluctuations indicate the relative percentage of the category's price index compared to the same period last year; below 100 indicates a year-on-year price decline.

This change is a result of consumer choices, meaning the market is restructuring its pricing of brand value.

Re-understanding the Positioning of Brand Value

The market doesn't need brands with excessive premiums, but brands that provide genuine value to consumers.

It's time to re-understand the pricing of brand value.

In the past, when supply was less than demand, as long as products were stable, had high distribution coverage, and sold well, consumers would likely consider them brands after repeated exposure.

Brands thus held pricing power. This is why brands could raise prices when costs changed.

Over the past 20 or 30 years, brand value pricing was mainly supported by market supply-demand relations where supply was less than demand.

But now, 1) the FMCG industry chain is mature; 2) the market is oversupplied; 3) consumers are fully educated by the market, their attitude towards brands will fundamentally change.

The supply-demand relationship has undergone earth-shaking changes, which is the fundamental reason for the change in brand value pricing.

If we still understand brand value based on the original supply-demand relationship, it seems no longer worth a premium.

"Why buy A if B is similar but cheaper? The products seem about the same." This is a question almost all FMCG brands must answer.

So, when products are no longer scarce, what should support the premium of brand value?

This is also key to understanding how the market re-prices brand value.

For ease of explanation, let's extend the product value formula from Liang Ning's "True Demand":

Product Value Formula = Functional Value + Emotional Value + Asset Value

For FMCG products, they don't involve asset preservation or appreciation, so the main value pricing basis is function and emotion.

Compared to white-label or private-label brands, the premium of brand value mainly comes from the differentiated functional and emotional value provided by the product itself.

Product functional value is the most basic attribute of FMCG. Therefore, when basic functions (like taste and usability) are met, the premium needs to be built by adding extra functions on top of the basic ones.

A typical case is the customized products many brands develop for Sam's Club. Few customers think Sam's products are expensive, even though their average order value isn't low.

Because Sam's allows brands to redesign products, adding extra attributes through differentiation, and this differentiation is clearly perceived by users, who are willing to pay for it.

Specific examples: Among customized products for Sam's, brands always add new differentiation on top of basic product functions, such as Qingmei's "high-protein" soy milk, or California Fields' "organic" and "pine mushroom" fish skin peanuts.

Product emotional value is an extended attribute of FMCG. FMCG products are consumed quickly, with eating and using as primary needs.

Beyond primary needs, if a product can provide emotional value, making consumers willing to pay a premium, it also effectively supports brand premium.

The recently viral Joyoung Hachimi North-South Mung Bean Soy Milk is a textbook case.

On an ordinary soy milk product, combined with young people's desire to share the meme "Hachimi," the product quickly became popular online.

If you only look at the taste, ordinary mung bean soy milk isn't worth that price. But if consumers find it fun and are willing to try it even at a higher price, treating it as an experience, then it's worth the price.

Adding cultural attributes to basic products, making consumers spend due to the desire to share memes.

Whether differentiating in functional or emotional value, brands are giving consumers a reason to pay for brand value.

This is also what brands should think about to escape the price war under the retail efficiency revolution: What is pricing brand value?

Retail involution is indeed a clear trend, but re-understanding the pricing logic of brand value, becoming a brand recognized by the market, and riding through consumption cycles might be where brands truly need to focus.

[Moving Towards the C-End] The 11th China FMCG Conference Time: March 16-18, 2026 Location: Chengdu, China